Posts categorized as 'Gartner Supply Chain Managment'

A few years ago, Kevin O’Marah said Gartner’s Top 25 Supply Chains was getting increasingly boring. Apple and P&G were annually #1 and #2. So Gartner looked at the numbers and created the Masters category. The criteria in qualifying for the Masters category is any company who has been in the top five rankings for at least seven out of the past 10 years. This year, Amazon was voted off the regular list, and joins Apple and P&G in this Masters category. In 2019, it’s likely both Unilever and McDonald’s will also be voted off the island and move into the Masters category, as well.

Gartner’s Top 25 Supply Chains has become like watching Survivor, the reality TV show that places people on a remote location, where they outwit, outplay and outlast the others. I laugh when they vote out the Navy Seal or the Triathlete. Then, they have no food and lose the following week’s challenge. At tribal council, they wonder why they lost. Easy answer here – vote out the best and the tribe gets weaker. Or, as Nature Boy Ric Flair says, “If you want to be the man, you gotta beat the man.” Something needs to be done differently in the Masters category if Gartner wants to avoid simply having two lists.

Once again – Peer vs Gartner

Another change needed is the vast difference between how the 169 peers vs the 38 Gartner analysts rank the companies.

I enjoy attending conferences. They give me the opportunity to reflect, reconnect and recharge. One conference I recently attended is the Gartner Supply Chain Executive conference in Phoenix, Arizona. With a lineup of very inspiring speakers, provocative content and pragmatic use cases shared by practitioners, the event certainly lived up to the theme of ACT (aspire, challenge and transform). Here are my takeaways:

1. Digital disruption is here and now: John Phillips, SVP of Customer Supply Chain, PepsiCo, presented some fascinating examples of getting products into the hands of consumers in unique ways powered by robotics and artificial intelligence. Here are some of the examples he shared to highlight how the traditional linear supply chains are being disrupted:

One message came through loud and clear during Gartner’s recent Supply Chain Executive Conference; you must ACT (aspire, challenge, transform) now if you want to have any hope in taking your supply chain profitably into the future. The conference’s theme of Aspire, Challenge and Transform in a Disruptive World featured prominently in the opening keynote address by two of the research firm’s VPs, Debra Hofman and Michael Burkett, who urged attendees to re-imagine their roles and ask how they will meet the future.

The pair talked about how disruption is the new norm. I would argue it always has been, but agree the explosion of interconnectivity and digital disruptors is causing an immediate impact on supply chain—even if the supporting technology behind it has individually been around for years. I’d also agree that to be successful it’s time to re-define the very notion of supply chain.

Providing an experience, not just a product

With more than $16 trillion exports moving between countries annually, the new reality isn’t just focused on getting the right product to the right people at the right time. As Hofman and Burkett put it, it’s about creating an experience-focused supply chain, which will force you as supply chain managers and leaders to gain a better understanding of your customers than ever before.

It is with great pride that we announce Kinaxis® has been placed in the Leaders quadrant of the recently published Gartner Magic Quadrant for Sales and Operations Planning Systems of Differentiation.

Gartner defines a sales and operations planning (S&OP) System of Differentiation (SOD) as a software solution that supports a Stage 4 or higher maturity S&OP process. According to the report, “Leaders have a strong vision for their S&OP SOD capabilities. They recognize the role they will need to play in enabling the move toward multienterprise horizontal planning allied with vertical integration that links strategy to operations and execution. They are looking at developing analytics to support probability-focused end-to-end predictive and prescriptive analytics to support profitability trade-offs and supply chain design and configuration capability.”1

Because of our unique ability to provide concurrent planning, Kinaxis RapidResponse® is an ideal solution to take companies through the various stages of S&OP maturity. We believe the next revolution in supply chain performance can only be achieved by realizing the speed of cross-functional decision making. As today’s press release indicated, our goal is to advance our customers’ S&OP processes from early stages through to Stage 4, and beyond, over time by taking advantage of all full capabilities in our single product.

On the bus ride back to the McDowell Marriott after the 2016 Gartner Top 25 Supply Chain event, I plugged my ear phones into my cell and listened to some Pearl Jam. Their classic hit, Last Kiss, the song summed up my thoughts about the 2016 rankings. So, the supply chain version of Last Kiss would go something like this…

“Oh where, oh where, can my supply chain be?

The trends took her away from me

She’s gone peripheral, so I’ve got to think Core

So I can get my supply chain back to reality”

The “Green Washing” of the Top 25

If you take out the new CSR ranking from 2016, your Top 25 rankings would be:

Actual 2016 Rank

Without CSR Rank

Wehlage Bold Predictions

1

Unilever

Amazon

Amazon

2

McDonald’s

McDonald’s

Unilever

3

Amazon

Unilever

Inditex

4

Intel

Intel

Intel

5

H&M

Cisco

Samsung

6

Inditex

H&M

Cisco

7

Cisco

Inditex

McDonald’s

8

Samsung

Nike

H&M

9

Coca Cola

Starbucks

Nike

10

Nestle

Colgate Palmolive

Starbucks

Three pieces of edgy insights from this:

a. My Bold Predictions were not far off. I did call the Nike and Starbucks entry into the Top 10. I am bolder on Samsung, simply because they had the highest 2016 Inventory Turns aside from McDonalds. As well, Samsung was 7th in Peer Voting rank, so the other “185” Peer voters agree with me.

Supply Chain Management is a relatively young practice, though many of the core principles go back many decades and are based on Operations Research concepts. These have focused on optimization and efficiency. Undoubtedly the world is a better place because of this focus on manufacturing and distribution efficiency over the past 50 years, resulting in large gains in productivity and therefore standards of living, initially in the West, but more recently around the world. All of this productivity gain was achieved in the analog phase.

We are now entering the digital phase of business. Even if we discount a great deal of the hype for what it is, hype, the reality is there has been a significant shift to digital. The title of the recent Gartner Supply Chain Executive Conference, “The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow”, says it all. It was focused on the manner in which companies can adapt to the digital world while still operating in the analog world. Hence bimodal. As outlined in the diagram below, the bimodal approach advocated by Gartner is about innovating on top of a stable platform. Once the value of the innovation has been captured and stabilized it can be drawn into the stable platform.

The keynote, delivered by David Willis of Distinguished Analyst at Gartner, describes the bimodal shift as:

The shift requires a new approach to investment in technology, leadership and talent, taking a more agile approach. The bimodal supply chain combines stable best practices with innovation-seeking behaviors to keep your organization competitive.

I have no question that Gartner is correct in their assertion of the need for a bimodal approach to the adoption of digital technology, whether more broadly to the business in general or specific to supply chain processes. Industry 4.0 is a reality. The Internet of Things is a reality. The only question is how quickly companies will absorb these innovations and adapt processes to accommodate them.

Innovate to survive. That’s the key message I took away from this year’s Gartner Supply Chain Executive Conference. While that may not be exactly what Gartner had in mind—the official theme was The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow—it was a running dialogue across all the sessions I sat in on.

Their idea of the bimodal supply chain in essence breaks things down into two ‘modes.’ Mode one focuses on tackling the issues your supply chain is facing today. Mode two is about innovation and growth, and the point was made in a number of sessions that you need to do both if you want to excel. If you’re someone who looks forward to change, who seeks it out because it’s inspiring and exciting, then mode two may seem obvious. You’ve likely already embraced this era where innovation across all facets of life has exploded and become ordinary.

To me, innovation, aka what’s driving mode two of Gartner’s bimodal supply chain model, is already intertwined in our day-to-day lives. Hasn’t it always been to some capacity? Innovation is what has taken us from the birth of the internet to this growing concept of the Internet of Things and now beyond.

We know innovation is important, it’s what moves us forward. History has proven that notion over, and over, and over again. Just look at the advancements in supply chain courtesy of innovation like MRP I, MRP II, and APS. Without them, we likely wouldn’t have been able to keep pace with the widespread globalization that has led to extensive supply chains and an explosion in product portfolios. I do agree strongly with Gartner that while we may all know how critical innovation is, we have to face the reality that actually achieving it is hard. Very hard. And in most cases true innovation isn’t just going to happen on its own. At least not in the type of siloed and conservative organizations that are quite prevalent across supply chains today.

How many times have you heard about the perils of having siloed supply chain functions? I know we’ve written about them more than just once or twice on this very blog. And while working inside your own little box definitely isn’t ideal, it’s also not quite the all-consuming, end of the world type evil that is responsible for single handedly bringing down your entire supply chain.

That’s because, in my opinion, very few supply chain practitioners actually want to work in total isolation. In many cases, they’re forced to, thanks to antiquated technology that makes company-wide alignment and collaboration more difficult than traversing Dante’s nine circles of hell. Endless email chains, revision after revision of all those Excel spreadsheets, countless hours spent importing and exporting data to and from various enterprise resource planning (ERP) systems. You can see why comparing it to purgatory isn’t that far of a stretch.

So what can these poor practitioners do? Implement a supply chain planning (SCP) system of record (SOR) of course! But what exactly is a SCP SOR apart from another in a very long line of supply chain-related acronyms?

Technology research firm Gartner Inc. defines a supply chain planning system of record as, “a planning platform that enables a company to create, manage, link, align, collaborate and share its planning data across a supply chain — from demand plan creation through the supply-side response, and from detailed operational planning through tactical-level planning.”

Okay, sounds great. But what does that actually all mean, and how can something like that even be implemented?